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Millennials and Gen Z Cite Higher Income as Leading Reason for Expected Increase in Holiday Spending

Thirst for Rewards Sparks Uptick in Credit Card Use this Holiday
Season

RIVERWOODS, Ill.--(BUSINESS WIRE)--
Twenty-five percent of consumers plan to spend more this holiday season
than they did last year, according to Discover’s annual holiday shopping
survey. Younger generations are leading the charge, as 35 percent of
Millennials and 33 percent of Generation Z report an expected bump in
spending, compared to 26 percent of Generation X and 16 percent of Baby
Boomers.

The number of those who expect to use credit cards to pay for most of
their holiday gifts jumped to 38 percent this year, up from 32 percent
in 2017. Less than a quarter, 24 percent, plan to use debit cards to pay
for most of their gifts, and 20 percent will primarily use cash. Among
those who favor credit cards when making holiday purchases, 54 percent
say earning rewards is the driving factor, up from 42 percent last year.

“The holidays are the busiest shopping season of the year and our goal
is to make it as simple and seamless as possible for our cardmembers to
earn rewards every time they use their Discover card,” said Laks
Vasudevan, Discover’s vice president of card programs, strategy and
marketing. “Rewards are a major driver for our cardmembers, which is why
we help maximize their earning potential during the holidays by aligning
our 5% cashback program with popular seasonal categories like Amazon.com
and wholesale clubs.”

Now through December, Discover cardmembers can earn 5% Cashback Bonus at
Amazon.com and wholesale clubs on up to $1,500 in purchases after
activation.

Gen Z Leads the Way for Mobile Shopping; Millennials Flip the Script
on Wearables, IoT Devices

This marks the first year Discover included Gen Z as its own distinct
generation in its annual survey. In doing so, the survey revealed the
youngest generation as being tech savvy holiday shoppers. Gen Z led the
way with 80 percent planning to use their mobile device to shop for
holiday gifts, compared to 73 percent of Millennials, 62 percent of Gen
X and 41 percent of Baby Boomers. Among those who plan to shop on their
mobile devices, 67 percent of Gen Z say they will do so for all or most
of their holiday shopping, compared to 66 percent of Millennials, 56
percent of Gen X and 39 percent of Baby Boomers.

Millennials slightly outpace Gen Z when it comes to embracing emerging
technologies like wearables and voice-activated devices when holiday
shopping. Thirty-six percent of Millennials and 35 percent of Gen Z plan
to use a wearable or Internet of Things (IoT) device—for example, a
payment-enabled watch or appliance—to make holiday purchases, compared
to 24 percent of Gen X and 8 percent of Baby Boomers. Likewise, 29
percent of Millennials and 27 percent of Gen Z plan to use a
voice-activated smart speaker to aid in their holiday shopping, compared
to 23 percent of Gen X and 8 percent of Baby Boomers.

Concern over Identity Theft Is Down, but Most Consumers Remain
Vigilant

More than half of respondents, 55 percent, say they are very or
moderately concerned about identity theft or fraud during the holidays,
down from 62 percent last year. Concern cuts across all generations, but
levels are higher among Baby Boomers and Gen X, with 60 and 56 percent,
respectively, saying they are very or moderately concerned, followed by
49 percent of Gen Z and 48 percent of Millennials.

The vast majority of survey respondents, 90 percent, say they take some
measure to protect themselves from identity theft or fraud, including 62
percent who say they monitor their financial statements, 41 percent who
monitor their credit reports and 39 percent who use a credit card with
built-in security features.

“As consumers embrace new digital technologies while holiday shopping,
such as smart speakers and wearable devices, Discover aims to provide
peace of mind to its cardmembers by offering a number of free security
features on all of our cards, like monitoring every Discover card
purchase every day, and offering Social Security number and new account
alerts1 that cardmembers can sign up for,” adds Vasudevan.

The national survey of 2,006 U.S. consumers ages 18 and up was
commissioned by Discover and conducted by Research Now, an independent
survey research firm, between October 19 and October 23, 2018. The
maximum margin of sampling error was ±2 percentage points with a 95
percent level of confidence. Generations are defined as: Generation Z,
born after 1997; Millennials, born between 1981 and 1996; Generation X,
born between 1965 and 1980; and Baby Boomers, born between 1946 and 1964.

About Discover

Discover Financial Services (NYSE: DFS) is a direct banking and payment
services company with one of the most recognized brands in U.S.
financial services. Since its inception in 1986, the company has become
one of the largest card issuers in the United States. The company issues
the Discover card, America's cash rewards pioneer, and offers private
student loans, personal loans, home equity loans, checking and savings
accounts and certificates of deposit through its direct banking
business. It operates the Discover Global Network comprised of Discover
Network, with millions of merchant and cash access locations; PULSE, one
of the nation's leading ATM/debit networks; and Diners Club
International, a global payments network with acceptance in 190
countries and territories. For more information, visit www.discover.com/company.

1 Discover® Identity Alerts currently include the following
services: (a) daily monitoring of your Experian® credit report and an
alert when a new account is listed on your report; (b) daily monitoring
of thousands of risky websites known for revealing personal information
and an alert if your Social Security Number on is found on such a
website. The Primary cardmember must agree online to receive identity
alerts. To see a list of Frequently Asked Questions, visit
discover.com/freealerts.